CCC: Net zero row back ‘likely to increase bills’

Prime minister Rishi Sunak’s decision to row back on several net zero targets is likely to hit consumers hardest, according to the Climate Change Committee (CCC).

The government’s statutory adviser has warned that Sunak’s net zero speech last month increases the risk of the UK missing its 2050 decarbonisation target and is also likely to increase customer bills and motoring costs.

While the core 2050 net zero pledge remained in place, Sunak’s 10 Downing Street speech last month saw the phase-out date for internal combustion engine cars and vans relaxed from 2030 to 2035, while around a fifth of households were exempted from the mid-2030s ban on new gas boilers.

In addition, moves to enforce more exacting energy efficiency standards on residential landlords have been abandoned.

The CCC assessment of Sunak’s speech – published today (12 October) – concludes that the prime minister’s intervention undermines consumer confidence in low carbon technologies, risks investment in sectors such as electric vehicles and was overall “unhelpful” as it lacked any evidence to support assurances that the UK’s targets will still be met.

It adds: “The cancellation of some net zero measures is likely to increase both energy bills and motoring costs for households – households who are also facing increasing impacts from climate change.

“Electric vehicles will be significantly cheaper than petrol and diesel vehicles to own and operate over their lifetimes, so any undermining of their roll-out will ultimately increase costs.”

It adds that the cancellation of regulations on the private-rented sector will lead to higher household energy bills as the axed measures to improve the efficiency of rented properties “would have reduced renters’ energy bills significantly”.

It adds that government estimates of the energy savings from the policy indicate that it would have saved tenants of upgraded properties £255 per year under ‘normal’ (pre-crisis) energy prices. As prices are currently elevated, the CCC estimates that the effect could be bigger in the near term (up to £325 at the current price cap).

The CCC assessment adds that the prime minister’s announcements “also increase longer-term risks to meeting the 2050 net zero target, primarily due to the changed policies on buildings decarbonisation”.

It adds: “The 20% exemption to the phase-out of fossil-fuel boilers will lead to significant residual emissions from buildings in 2050, unless boilers installed in these exempt homes after 2035 are subsequently scrapped before the end of their natural lifetime.

“Furthermore, unless there is a clear definition of which 20% of households are exempt, it may lead to a lack of clarity for a wider share of the buildings sector. Additionally, technology cost reductions often stem from policy certainty, which these announcements undermined.”

The CCC is also critical of the government for failing to adjust the strike price for offshore wind projects in the latest contracts for difference auction, which saw no such bids submitted. It says that the government had been warned that failing to do so would lead to a lack of bids from offshore wind developers.

Piers Forster, chair of the Climate Change Committee, added: “In June , the Climate Change Committee expressed concerns to Parliament about the pace of change required to meet the UK’s climate goals over the 2030s. Since then, there have been important climate announcements from government, including the prime minister’s speech on 20 September. As promised, we have run the numbers.

“We welcome tangible positive policy progress in some key areas, most notably with the implementation of the new Zero Emission Vehicles mandate and the recent deal with Tata Steel for industrial electrification in Port Talbot. But the prime minister has also relaxed important policies to decarbonise buildings and transport and sent a message to business and the international audience that he will allow more time for the UK to transition to key clean technologies. These steps have countered the positive progress of other announcements.

“We remain concerned about the likelihood of achieving the UK’s future targets, especially the substantial policy gap to the UK’s 2030 goal. Around a fifth of the required emissions reductions to 2030 are covered by plans that we assess as insufficient. Recent policy announcements were not accompanied by estimates of their effect on future emissions, nor evidence to back the government’s assurance that the UK’s targets will still be met. We urge the government to adopt greater transparency in updating its analysis at the time of major announcements.

“Our position as a global leader on climate has come under renewed scrutiny following the prime minister’s speech. We urge the government to restate strong British leadership on climate change in the crucial period before the next climate summit, COP28 in Dubai.”

The CCC’s former chair Lord Deben gave his view of Sunak’s net zero speech during a recent interview with Utility Week. To read the interview in full, click here to access the digital edition where it was first published.